Mealey's Securities

  • October 15, 2021

    9th Circuit Asked To Affirm Dismissal Of Data-Security Breach Securities Claims

    SAN FRANCISCO — A federal judge in California did not err in dismissing a pension fund’s federal claims in a securities class action against a software company and two of its senior executives stemming from statements they made regarding data-security measures the company had in place before discovering a massive data breach because the pension fund failed to sufficiently plead any of the elements of those claims, the company and its officers argue in an Oct. 13 appellee brief filed in the Ninth Circuit U.S. Court of Appeals.

  • October 15, 2021

    Monster Energy Hit With Board Diversity Shareholder Derivative Lawsuit

    SANTA ANA, Calif. — An investor filed a shareholder derivative action against several senior executives and members of the board of directors of energy drink maker Monster Beverage Corp. on Sept. 18 in California federal court, alleging that the defendants breached their fiduciary duty and violated federal securities laws by failing to appoint any people of color or minorities to senior leadership positions within the company (Frank Falat v. Rodney C. Sacks, et al., No. 20-1782, C.D. Calif.).

  • October 15, 2021

    Judge:  Securities Case Against 3M Related To PFAS Liability Lacks Particularity

    MINNEAPOLIS — A federal judge in Minnesota on Sept. 30 dismissed a securities fraud class action against the 3M Co., ruling that shareholders did not allege with sufficient particularity that the company misled them with regard to its liabilities from litigation stemming from its production of per- and polyfluoroalkyl substances (PFAS).

  • October 15, 2021

    Investor Class, Subclass Certified In Mattel Stock-Drop Suit

    LOS ANGELES — A federal judge in California on Oct. 6 granted class certification in a securities class action against toy maker Mattel Inc., certain of its current and former senior executives and others, ruling that shareholders have sufficiently shown that the proposed class meets statutory requirements for approval (In re Mattel Inc. Securities Litigation, No. 19-10860, C.D. Calif., 2021 U.S. Dist. LEXIS 194121).

  • October 15, 2021

    Investors Reach $300 Settlement In Derivative Suit Over Chinese Company Spin-Off

    NEW YORK — Defendants in a shareholder derivative action brought on behalf of a Chinese social media technology and venture capital firm will pay at least $300 million to settle claims that they breached their fiduciary duty or aided in the alleged breach through their involvement in a scheme to improperly spin off the company’s venture capital business to the detriment of the company’s shareholders, according to a stipulation of settlement filed Oct. 7 in New York state court (In re Renren Inc. Derivative Litigation, No. 653594/2018, N.Y. Sup, New York Co.).

  • October 15, 2021

    Gap Investor Asks 9th Circuit To Overturn Dismissal In Board Diversity Suit

    SAN FRANCISCO — An investor who brought a shareholder derivative lawsuit against several current and former executive officers and directors of clothing retailer The Gap Inc. over the company’s lack of racial and ethnic diversity on its board of directors and senior management team asked a Ninth Circuit U.S. Court of Appeals panel on Oct. 7 to overturn a federal magistrate judge’s dismissal of her claims on the basis of forum non conveniens because her federal securities law claim provided the district court with exclusive jurisdiction over the claim (Noelle Lee v. Robert J. Fisher, et al., No. 21-15923, 9th Cir.).

  • October 15, 2021

    SPAC Officers, Directors Seek Dismissal Of Investor’s ICA, IAA Claims

    NEW YORK — Certain officers, directors and advisers of a special purpose acquisition company (SPAC) on Oct. 12 asked a federal judge in New York to dismiss claims for violation of the Investment Company Act of 1940 (ICA) and the Investment Advisers Act of 1940 (IAA) brought against them because the investor has failed to sufficiently plead that the SPAC is an investment company or that its advisers fit the IAA’s requirements for investment advisers.

  • October 14, 2021

    Hearing Aid Maker Hit With Investor Suit Over Insurer Reimbursement Practices

    SAN FRANCISCO — A medical device maker that manufactures and distributes hearing aids and two of its senior executives violated federal securities law by failing to disclose to investors that the company was the subject of a federal criminal investigation into its billing and reimbursement practices with insurers, causing the company’s financial results to be impacted, a shareholder alleges in an Oct. 6 class complaint filed in California federal court.

  • October 14, 2021

    SEC: High Court Review Of Agency’s Enforcement Power Under BSA Unnecessary

    WASHINGTON, D.C. — U.S. Supreme Court review of a federal appellate court’s ruling that the Securities and Exchange Commission was exercising its authority under provisions of the Securities Exchange Act of 1934 when it filed an enforcement action against a broker-dealer stemming from the defendant’s alleged failure to comply with the reporting provisions of the Bank Secrecy Act (BSA) is unnecessary because the appellate panel correctly determined that the SEC was asserting its independent enforcement power under the BSA, the SEC argues in an opposition brief filed Oct. 4 in the Supreme Court.

  • October 13, 2021

    Disgorgement Order In Penny Stock Fraud Suit In Line With Liu, Panel Rules

    NEW ORLEANS — A federal district court’s disgorgement order in a securities fraud lawsuit brought by the Securities and Exchange Commission against an energy company and others stemming from the defendants’ sale of unregistered securities in the penny stock company and issuance of alleged misrepresentations “easily satisfies” the requirements for such relief established by the U.S. Supreme Court in Liu v. SEC, a Fifth Circuit U.S. Court of Appeals panel ruled Oct. 12 in affirming the district court’s disgorgement order.

  • October 11, 2021

    Shareholder Challenge Of FHFA Leadership Structure Remanded To District Court

    ST. LOUIS — U.S. Supreme Court precedent in Collins v. Yellen supports an argument made by Fannie Mae and Freddie Mac shareholders that a federal district court erred in dismissing their lawsuit challenging the leadership structure of the Federal Housing Finance Agency (FHFA) for lack of standing because the parties in the instant action are similar to those in Collins and allege the same harms, an Eighth Circuit U.S. Court of Appeals panel ruled Oct. 6 in partially reversing and remanding the district court’s ruling.

  • October 07, 2021

    Federal Judge:  Bump-Up Exclusion Does Not Bar D&O Coverage For $90M Settlement  

    ALEXANDRIA, Va. — A federal judge in Virginia on Oct. 5 held that an insurance policy’s bump-up exclusion does not unambiguously preclude coverage for the $90 million settlement of two underlying lawsuits arising from a 2015 merger, granting the insured’s motion for partial summary judgment in its lawsuit seeking directors and officers liability coverage for the underlying settlement.

  • October 07, 2021

    Panel Gives Fraud Suit Over ICO Pump-And-Dump Scheme A 2nd Life

    NEW YORK — A federal district court erred in applying the U.S. Supreme Court’s ruling in Morrison v. National Australia Bank, Ltd. in an investor class action against the developer of a transportation rental platform and cryptocurrency that would be used to make purchases on the platform because the district court improperly concluded that the plaintiffs’ claims were “substantively federal securities claims for fraud brought under federal securities law, a Second Circuit U.S. Court of Appeals panel ruled Oct. 4 in vacating and remanding.

  • October 07, 2021

    Securities Claims Against Private Prison Operator, Others Trimmed

    FORT LAUDERDALE, Fla. — A federal judge in Florida on Sept. 23 substantially granted a motion to dismiss filed by an operation of for-profit prisons and halfway houses and others in a securities class action, ruling that lead plaintiffs have failed to sufficiently plead an actionable misstatement or omission and scienter regarding a number of the lead plaintiffs’ claims stemming from the defendants’ alleged misrepresentation of the company’s business and financial condition.

  • October 06, 2021

    Law Firms: J&J Subpoena Of Media Missives Misses Mark

    TRENTON, N.J. — The documents at the heart of corrective disclosures in a securities case against Johnson & Johnson for allegedly failing to disclose the presence of asbestos in talc are already in the company’s possession, and any other subpoenaed communications with media are protected by the First Amendment to the U.S. Constitution, attorneys told a federal judge in New Jersey on Sept. 20 in urging him to quash a subpoena.

  • October 06, 2021

    Addition Of Plaintiffs To Uber IPO Suit Not In Conflict With China Agritech

    SAN FRANCISCO — A lead plaintiff’s addition of named plaintiffs in a securities class action against on-demand ride and food delivery transportation company Uber Technologies Inc. and others is not barred by the U.S. Supreme Court’s ruling in China Agritech v. Resh because the new plaintiffs have been added to an existing class action and are not part of a new filing, a federal judge in California ruled Oct. 1 in denying the defendants’ motion to dismiss.

  • October 01, 2021

    Scheme Liability Claim Not Overlooked In Cannabis Company’s Securities Suit

    NEW YORK — A federal judge in New York on Sept. 28 ruled that lead plaintiffs in a securities class action against a Canadian cannabis company and certain of its current and former senior executives are not entitled to reconsideration of the judge’s ruling dismissing a scheme liability claim against the company’s chairman of the board of directors because the lead plaintiffs failed to properly bring the claim in their amended complaint.

  • September 30, 2021

    Panel: Consent Decree’s No-Deny Provision Within Constitutional Limits

    NEW YORK — A federal district court’s denial of a Xerox Corp. former senior executive’s motion for relief from judgment, in which the executive sought to invalidate a no-deny provision contained in a consent order he agreed to with the Securities and Exchange Commission, was proper because the defendant failed to sufficiently allege a jurisdictional defect or violation of his constitutional right to due process, a Second Circuit U.S. Court of Appeals panel ruled Sept. 27 in affirming.

  • September 28, 2021

    Shareholder Alleges Securities Violations In Fracking Merger Due To SEC Filing

    NEW YORK — A stockholder on Sept. 15 sued an energy company, its board of directors and a hydraulic fracturing operator in New York federal court contending that they violated federal securities laws when then approved a merger on grounds that the transaction followed “an insufficient process in which the Board failed to conduct a market check for potentially interested third parties.”

  • September 28, 2021

    Stockholder:  Energy Company’s Prospectus Lacked Material Information, Violated Law

    PHILADELPHIA — A stockholder on Sept. 16 sued the officers of an energy company in Pennsylvania federal court contending that they violated federal securities laws when they approved a merger between the company and a hydraulic fracturing operator, which depended upon a prospectus that the stockholder says failed to disclose material information.